TMI Blog2018 (8) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... ty under any of the provisions of Act and Rule on fulfilment of requirement of sub-rule(3) would have application to subrule 4 since sub-rule 4 starts with an non-obstinate clause nothing contained in sub-rule 3 shall apply to a case where service tax has not been levied or paid or short levied or short paid or erroneously refunded by reason of those five grounds mentioned above under proviso to subrule (1) of Rule 73. In view of the fact that parameters of proviso to Section 73 and ingredients constituting suppression of fact by the appellant has not been made out and the same had not been established by the respondent department before the authorities adjudicating the matter, it can safely be concluded that Section 4 would have no application to the case of the appellant attracting penalty, in which case explanation 2 to sub-section (3) of Section 73 will have its effect - appeal allowed - decided in favor of appellant. - Appeal No. ST/86255/2018 - Order No: A/86979 / 2018 - Dated:- 26-7-2018 - Hon ble Dr. Suvendu Kumar Pati, Member ( Judicial ) Shri Rajiv Luthia, CA for the appellant Shri Atul Sharma, (AR) for the respondent ORDER The order of Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... untant for the appellant submitted that notice should not have been issued after service tax liability along with interest was discharged in view of proviso to Section 73(3) and extended period of limitation should not have been invoked as well as consequent penalties under Section 77 78 should also have not been imposed in the absence of ill intention of the appellant. He also took the court to the provisions of Point of Taxation Rules, 2011 that came into force on 01.04.2011 and its subsequent amendment made to Rule 9 of said Point of Taxation Rules, 2011 by Notification no.25/2011-ST dated 31.03.2011 by virtue of which discretion was with the tax payer upto bar up to 30.06.2011 to adhere to date of invoice or date on which payment was received as the date for determination of Point of Taxation and wanted to justify the stand of the appellant that going by detail of transaction furnished by the appellant between period 01.04.2011 and 31.01.2014 which was accepted by the first adjudicating authority for reducing the total demand from ₹ 17,79,239/- to ₹ 15,16,841/-, it can conveniently be said that aggregate of the duty payable for bills up to 30.06.2011 was ₹ 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to analyse if there was any ill intention on the part of the appellant to evade tax so as to impose penalty contemplated under Section 77 and 78 of Finance Act, 1994. 6. Proviso to Section 73 reads as follows:- PROVIDED that where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of- (a) fraud; or (b) collusion; or (c) wilful mis-statement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax, by the person chargeable with the service tax or his agent, the provisions of this sub-section shall have effect, as if, for the words [Eighteen months] , the words five years had been substituted. Therefore for reason of fraud/collusion/wilful mis-statement/ suppression of fact or contravention of the provisions and rules intended to evade tax would entail the departmental officer to go beyond the normal period of 18 months and in such a eventuality as contemplated under Rule 4 that provides an exclusion clause to non-imposition of penalty in respect of payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the prescribed time limit. But immediately he changed his version to state that the same amounts to suppression (from the department) of the fact that they had not discharged service tax liability on those invoices to evade payment of service tax. I failed to understand how failure has become synonymous with suppression. 8. The dictionary meaning of suppression is that it is an act of preventing something from being seen or expressed or from operating. Failure on the other hand is incapability or incapacity of a person to act. Therefore, one of these two words cannot be a substitute for another. 9. When any new provision is introduced into the Act and Rule, it s possible bearing on the common mass is mainly ignorance of such change. Understanding of the provision of law or Rule in its infancy stage are bound to result in misinterpretation or misapplication and even in the field of law say experts in the field of law are bound to commit mistakes and the same is apparent on record, which can be traced out from the order of the first appellate authority. A reproduction of such error in calculating the tax liability by the auditor himself is found at para 15,16 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ? Construing mere non-payment as any of the three categories contemplated by the proviso would leave no situation for which, a limitation period of six months may apply. In our opinion, the main body of the Section, in fact, contemplates ordinary default in payment of duties and leaves cases of collusion or wilful misstatement or suppression of facts, a smaller, specific and more serious niche, to the proviso. Therefore, something more must be shown to construe the acts of the appellant as fit for the applicability of the proviso. 11. In view of the above facts and circumstances, and in view of the fact that parameters of proviso to Section 73 and ingredients constituting suppression of fact by the appellant has not been made out and the same had not been established by the respondent department before the authorities adjudicating the matter, it can safely be concluded that Section 4 would have no application to the case of the appellant attracting penalty, in which case explanation 2 to sub-section (3) of Section 73 will have its effect. Hence the order- 12. The appeal is allowed and the order passed by the Commissioner (Appeals) in PUN-EXCUS-001-APP/0959/2017- 18 on date ..... X X X X Extracts X X X X X X X X Extracts X X X X
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